MAHARASHTRA April 2010 MAHARASHTRA April 2010 Investment climate of a state is determined by a mix of factors • Skilled and cost-effective labour • Procedures for entry and exit of firms • Labour market flexibility • Industrial regulation, labour regulation, other • Labour relations government regulations • Availability of raw materials and natural • Certainty about rules and regulations resources • Security, law and order situation Regulatory framework Resources/Inputs Investment climate of a state Incentives to industry Physical and social infrastructure • Condition of physical infrastructure such as • Tax incentives and exemptions power, water, roads, etc. • Investment subsidies and other incentives • Information infrastructure such as • Availability of finance at cost-effective terms telecom, IT, etc. • Incentives for foreign direct investment (FDI) • Social infrastructure such as educational and • Profitability of the industry medical facilities 2 MAHARASHTRA April 2010 Contents Advantage Maharashtra State economy and socio-economic profile Infrastructure status State policies and incentives Business opportunities Doing business in Maharashtra 3 ADVANTAGE MAHARASHTRA Maharashtra April 2010 Maharashtra – State profile • Located in the Western region of India, Maharashtra stretches over 307,690 sq km, with an estimated population of 109.7 million as of March 2009. • Maharashtra is the third-largest state in India in terms of area and the second-largest in terms of population. • The state has 35 administrative districts. Mumbai is the capital city. • The state shares borders with Gujarat, Madhya Pradesh, Chhattisgarh, Andhra Pradesh, Karnataka, Goa and the Union Territory of Dadra and Nagar Haveli. On its West is the Arabian Sea. • Pune, Nagpur, Thane, Nasik, Solapur, Kolhapur, Sangl i, Aurangabad, Amravati and Ratnagiri are the other major cities of Maharashtra. • The most commonly spoken language of the state is Marathi. Konkani, Hindi and English are the other prominent languages. 4 ADVANTAGE MAHARASHTRA Maharashtra April 2010 Advantage Maharashtra … (1/2) The trade and commerce hub of India Mumbai in Maharashtra is known as the trade and commerce capital of India. The city is also the financial centre of the country. In recent years, Maharashtra has emerged as a key hub for IT and ITeS, electronics, and the captive business outsourcing industries. Policy and fiscal incentives Maharashtra offers a wide range of subsidies, fiscal and policy incentives and assistance for businesses under the “Industrial, Investment and Infrastructure Policy, 2006”. The state also has sector-specific policies for IT and ITeS, biotechnology and tourism. Abundant labour pool Maharashtra has a literacy rate of 76.9 per cent. The state has a large base of skilled and industrial labour, making it an ideal destination for knowledge-based and manufacturing sectors. 5 ADVANTAGE MAHARASHTRA Maharashtra April 2010 Advantage Maharashtra … (2/2) Facilitating infrastructure The state has a well-developed social, physical and industrial infrastructure. It has good road, rail, port and air connectivity. Apart from eight airports, the state has two major and 53 minor ports. It also has a well developed power supply grid. High infrastructural growth Maharashtra has had high growth in the infrastructure sector in the last decade. Recently, there has been a considerable increase in the number of industrial clusters, and public private partnerships projects in the in the infrastructure domain. Stable political environment The state has a stable political environment with a single party government. The State Governments is committed towards providing conducive business climate through progressive policies and incentives. 6 ADVANTAGE MAHARASHTRA Maharashtra April 2010 Maharashtra in figures … (1/2) Parameter Maharashtra All-states Source Economy GSDP as a percentage of all states’ 15.3 100.0 CMIE, as of 2007-08, current prices GSDP Average GSDP growth rate (%) 15.9 11.6 CMIE, 2000-01 to 2007-08 Per capita GSDP (US$) 1,369.9 998.1 CMIE, 2007-08 Physical infrastructure Central Electricity Authority, Installed power capacity (MW) 15,030.0 98,996.4 as of March 2009 Cellular Operators Association of GSM cellular subscribers (No) 31.035,903 367,328,179 India, as of November 2009 Broadband subscribers (No) 934,351* 4,981,976 As of October 2008 Ministry of Road Transport & National Highway length (km) 4,176 70,548 Highways, 2007-08 Major and minor ports (No) 2+ 53 12 + 187 Ministry of Shipping Airports (No) 8 133 Airport Authority of India Social indicators Literacy rate (%) 76.9 64.8 Census of India, 2001 Central Bureau of Health Birth rate (per 1,000 population) 18.1 23.1 Intelligence, 2007 *Subscribers for Maharashtra and Goa 7 ADVANTAGE MAHARASHTRA Maharashtra April 2010 Maharashtra in figures … (2/2) Parameter Maharashtra All-states Source Ease of doing business Department of Industry Policy & Promotion, FDI inflows (US$ billion) 36.7* 102.1 April 2000 to October 2009 Outstanding investments (US$ billion) 201.7 1,709.7 As of December 2008 Industrial Infrastructure PPP projects (No) 31 460 www.pppindiadatabases.com Notified as of April 2009, SEZ (No) 58 347 www.sezindia.nic.in *Combined FDI inflows for Maharashtra, Dadra & Nagar Haveli, and Daman and Diu; PPP: public-private partnership, SEZ: special economic zone Parameter Maharashtra Government Policy support Sectors with specific policies Industry overall, IT and ITeS, biotechnology, tourism Availability of labour Adequate labour available (both skilled and unskilled) 8 ADVANTAGE MAHARASHTRA Maharashtra April 2010 Key industries with policy thrust and factor advantages Industry attractiveness matrix High IT and ITES Biotechnology Textile Tourism Agro and agro processing Medium Auto and auto- Policy thrust Policy Gems and components jewellery Petrochemicals, Media and Oil and gas entertainment Low Medium High Factor advantage *Factor advantages include benefits due to geographical location and availability of factors such as talent pool, natural resources and capital 9 MAHARASHTRA April 2010 Contents Advantage Maharashtra State economy and socio-economic profile Infrastructure status State policies and incentives Business opportunities Doing business in Maharashtra 10 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Maharashtra April 2010 Socio-economic snapshot of Maharashtra Parameters Maharashtra Capital Mumbai Geographical area (sq km) 307,690 Administrative districts (no) 35 Population density (persons per sq km) 314 Total population (million)* 96.8 Male population (million) 50.4 Female population (million) 46.4 Population growth rate 1991-2001 (%) 22.7 Sex ratio (females per 1,000 males)* 922 Literacy rate (%)* 76.9 Male (%) 85.9 Female (%) 67.0 Average life expectancy (years)^ 66.2 Source: Government of Maharashtra website, *Census 2001 ^Sample Registration System Survey(1998-2002) 11 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Maharashtra April 2010 Maharashtra’s GSDP • The gross state domestic product (GSDP) Maharashtra’s GSDP of Maharashtra was US$ 147.0 billion in (US$ billion) 2007-08. 2007-08 147.0 • The compound annual growth rate 2006-07 121.2 (CAGR) of GSDP from 2000-01 to 2007- 2005-06 97.5 08, was about 15.9 per cent. 2004-05 85.5 CAGR 15.9% • Maharashtra ranks first amongst all the 2003-04 77.9 Indian states in terms of GSDP. 2002-03 65.7 2001-02 56.9 2000-01 52.2 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 Source: CMIE 12 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Maharashtra April 2010 Maharashtra’s NSDP • The net state domestic product (NSDP) of Maharashtra’s NSDP Maharashtra was US$ 125.6 billion in 2007- (US$ billion) 08. 2007-08 125.6 • The compound annual growth rate (CAGR) 2006-07 103.6 of NSDP from 2000-01 to 2007-08 was 2005-06 83.4 about 15.7 per cent. 2004-05 73.5 CAGR 2003-04 67.3 • Maharashtra ranks first amongst all the 15.67% Indian states in terms of NSDP. 2002-03 56.7 2001-02 49.0 2000-01 45.3 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 Source: CMIE 13 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Maharashtra April 2010 The tertiary sector has an increasing share in Maharashtra’s economy • In 2007-08, the tertiary sector contributed Percentage distribution of GSDP 62.9 per cent to the state’s GSDP at 100 current prices. It was followed by the CAGR secondary sector at 21.5 per cent. 80 11.3% • The tertiary sector is driven mainly by 61.5% 62.9% trade, hotels, restaurants, communication, b 60 anking and insurance. 40 13.3% • The share of the primary sector in GSDP 21.1% 21.5% was 15.5 per cent in 2007-08 vis-à-vis 17.3 20 per cent in 2000-01. 17.3% 15.5% 13.4% 0 2000-01 2007-08 Primary Sector Secondary Sector Tertiary Sector Source: CMIE 14 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Maharashtra April 2010 Per capita GSDP • The state’s per capita GSDP in 2007-08 was Per capita GSDP US$1,369.9. (US$) 1600 • The per capita GSDP has increased at a 1369.9 CAGR of 14.1 per cent between 2000-01 1400 1145.7 and 2007-08. 1200 936.0 1000 833.3 771.9 • Maharashtra ranks among the top five states 800 660.9 580.7 in terms of per capita GSDP. 600 543.1 400 200 0 2000- 2001- 2002- 2003- 2004- 2005- 2006- 2007- 01 02 03 04 05 06 07 08 Source: CMIE 15 STATE ECONOMY AND SOCIO-ECONOMIC PROFILE Maharashtra April 2010 Key industries in Maharashtra • The resources, policy incentives, infrastructure and Key industries in Maharashtra climate in the state support investments in the IT, electronics, pharmaceuticals, food processing, agro • Pharmaceuticals processing, textiles and retail sectors. • Biotechnology • IT and ITeS • Maharashtra Agro Industries Development Corporation (MAIDC), founded in 1965, is responsible for • Engineering development of agro-based units in the state. • Auto and auto components • Petroleum • Maharashtra Industrial Development Corporation • Oil and gas (MIDC) is primarily responsible for the development of industrial infrastructure in the state.